Trade drop chokes inland container depots' revenue

Infograph: TBS

A decline in the country's export-import trade, caused by an economic slowdown both locally and globally, has put a strain on the business of private inland container depots (ICDs).

In 2023, according to data from the Bangladesh Inland Container Depots Association (Bicda), the handling of containers with export goods dropped by 11.07% year-on-year.

According to Bicda, the monthly revenue of private ICDs was about Tk130 crore in normal times, but it has now declined to Tk90-91 crore. Due to reduced business, income has dropped by approximately 30%.

Imran Fahim Noor, managing director of Vertex Off-Dock Logistic Services Limited, told The Business Standard, "We are facing multifaceted challenges, including rising oil prices, a soaring dollar, and reduced trade volume. Keeping the business running has become a struggle for us. ICD business has declined by about 25-30%, and it remains uncertain when the situation will rebound."

Before boarding ships, seaborne exports are loaded into containers at private ICDs.

The depots handled 661,152 twenty-foot equivalent units (TEUs) of export cargo containers last year, a decrease from 743,761 TEUs in 2022.

In Chattogram, there are 19 private inland container depots, also known as off-docks, which handle almost 95% of seaborne export goods and 38 types of import goods, including food items such as rice, wheat, mustard seeds, chickpeas, pulses and scraps.

After unloading import containers at the port, 38 types of goods are transported to ICDs. Approximately 23% of the total goods imported in containers through the Chattogram port are then released from the depots.

According to Bicda, the amount of container handling for imported goods has also declined in ICDs. In 2023, the handling of import goods in ICDs was 216,537 TEUs, marking a 9.77% decline from the 239,991 TEUs handled in 2022.

Exporters and ICD businesses have attributed the shrink in container handling to a global trade slowdown, a dollar crisis, and reduced orders of ready-made garments.

ICD entrepreneurs say a majority of them experienced a dip in revenue due to reduced business, leaving them struggling to repay bank loan instalments.

Bicda President Nurul Qayyum Khan said, "The decrease in ICD income will impact the repayment of bank loans, leading to an increase in the amount of bank loans with interest."

"Additionally, due to reduced work, the number of workers has also been cut. Currently, depot owners are incurring losses in running operational activities. It seems there is no way out of this situation except to overcome the global trade slowdown," he told TBS.

ICDs have a container holding capacity of approximately 76,000 TEUs, with a total investment in the depots amounting to Tk6,000 crore. The workforce comprises about 20,000 employees on both a permanent and temporary basis.

Mohammed Shamsul Azam, director of the Bangladesh Knitwear Manufacturers and Exporters Association, said the demand for ready-made garments has declined due to the global trade slowdown.

"As a result, buyers reduced their orders, leading to a decrease in the import of raw materials. This decline in demand has resulted in a decrease in export volume," he told TBS.

At the same time, he said the overall situation, including political uncertainty in the country, has negatively impacted the handling of import and export containers in ICDs.

In 2023, empty container handling dropped by 6,637 TEUs to 13,26,300 TEU compared to a year ago.